D.E. Shaw to Return Billions After Hedge Fund Gains 18 Percent
D.E. Shaw plans to return billions to clients after strong hedge fund performance, with flagship fund gaining 18% and Oculus soaring 36% last year
D.E. Shaw, Hedge Fund, New York, Investment, Finance
New York: D.E. Shaw & Co. is gearing up to return a hefty sum to its clients. This comes after two of its major hedge funds saw impressive double-digit returns last year.
The flagship Composite hedge fund gained 18% in 2024, while the Oculus fund, which focuses on macro strategies, skyrocketed by 36%. That’s its best performance since it started two decades ago!
With over $65 billion in assets, a big chunk is tied up in these two funds. D.E. Shaw is expected to return about half of last year’s profits to clients, which could mean billions of dollars back in their pockets.
A spokesperson for the firm, based in New York, didn’t comment on the specifics. It’s interesting to note that many top hedge funds are not just closing their doors to new investments but are also returning some of their external capital each year to keep their assets manageable.
Last year, D.E. Shaw returned all profits from these funds to clients, even though those gains were modest. But this time, the returns are looking much better across various investment strategies.
The Composite fund has been a solid performer, with only one losing year since it launched in 2001. It’s had double-digit gains in 18 out of the last 23 years, boasting an annualized net return of 12.7%.
On the other hand, the Oculus fund has never posted a negative year and has delivered an impressive 13.7% in annual net returns since it began.
David E. Shaw founded the firm back in 1988, and it was one of the pioneers in using complex algorithms for trading. Over the years, it has blended in some human oversight and private equity investments. Shaw stepped back from daily operations in the early 2000s, leaving the firm in the hands of an executive team.